The value proposition for IBM System Networking is to provide the essential network connectivity solutions under the IBM brand to connect servers to servers, servers to storage and storage to storage. IBM System Networking offers a compelling alternative for customers seeking more efficient data centers with the greatest business value and lowest total cost of ownership for their data center networks.

System networking plays a critical role in customers’ server and storage buying decisions. Today, many customers are deploying IT infrastructure on an unprecedented scale – data centers are expanding from 5,000 to 50,000 and 100,000 servers. For such scale-out architectures, the system network plays a critical role. Consider density; if it requires three data centers to house 5,000 servers, how many data centers will it take to house 50,000 servers? The answer better not be 30! So, the system network must deliver the high-density networking required to support highly consolidated and massively virtualized data center infrastructures.

If you are a CIO undertaking an order of magnitude increase in infrastructure, you want to increase utilization through virtualization, which requires the system network to be virtualization aware. And of course, the system network is vital to the security of this infrastructure.

If you have an order of magnitude increase in infrastructure, much of the functionality required to solve deployment and management issues can reside on data center switches implemented within the system network.

As companies take their businesses online, rapid and accurate business intelligence becomes ever more critical, which requires the system network for fast transport of information to and from analytic engines.

If you are employing an order of magnitude more infrastructure, total cost of ownership is important, and companies spend 15 to 20% of their investment in infrastructure on the network.

To address CIO’s key strategic issues of scaling, density, utilization/virtualization, security, data management and cost ownership, system networking is the common thread. IBM is an incredibly reputable server and storage vendor, and you can see the critical role the network plays.

Last year, I wrote about the Information Technology (IT) related issues that keep the many CIOs I have met around the world awake at night. With 2010 behind us now, I thought it might be interesting to reflect on how IBM System Networking addressed for the issues/ pain points our customers spoke about.

1. An increasing reliance in IT to support the growing needs of the business has made scalability a major concern for CIOs. How do you scale the IT infrastructure in a cost effective manner to keep pace with the growing demands of the business? In 2010, CIOs saw dramatic increases in I/O driven by virtualization, high performance computing, video and other bandwidth-intensive uses and frequently chose IBM System Networking’s 10 Gigabit Ethernet switches to keep pace with this growth. IBM System Networking also delivered a single-chip 40 Gigabit Ethernet switch to bring terabit scale to the data center network.

2. More physical IT infrastructure is impacting data center space, power and cooling. This raises concerns about density – being able to pack more compute and storage capacity per square foot of raised floor so as to get the maximum return on data center building infrastructure. IBM System Networking introduced top-of-rack switches such as our IBM BNT RackSwitch G8052 and IBM BNT RackSwitch G8264 to enable the enterprises to build very high-density data center networks with four main characteristics – low latency, lossless, low cost, and low power.

3. With so much capital being invested in IT infrastructure, the question of maximizing utilization of this infrastructure is also top-of-mind. In the airline business they call this “yield management.” In the hospitality business, they call it “occupancy rates.” Innovations such as IBM System Networking’s VMready with Virtual Vision ensure that customers can virtualize their server infrastructure while maximizing virtual machine security, high availability, and mobility.

5. An increasing amount of sensitive information about businesses (customer and supplier information, costs and prices, contracts, sensitive intellectual property information, etc.), is going online. Protecting such information from getting in the wrong hands is of paramount importance and so security is very high on the CIO’s agenda. Security is increasingly required as an “embedded” characteristic of data center networks. IBM System Networking iFlow Director software enables the creation of wire-speed network security infrastructure and is rapidly gaining momentum in the market place.

6. And finally, more now than ever before, customers are very sensitive to total cost of ownership (TCO) of their IT infrastructure. IBM System Networking delivers a better end-to-end TCO to its customers that encompasses the compute, storage, and network elements of the IT infrastructure. Do a quick calculation on your cost & power savings with our TCO calculator.

I believe our industry indeed made significant progress in 2010 in helping CIOs address the issues that keep them awake at night. And, I am proud that IBM System Networking continues to play a key role in addressing these critical pain points.

As we enter 2011, businesses are busily refining strategies for harnessing and leveraging IT in the year ahead and beyond. It’s crystal ball time once again, so based on countless interactions with CIOs, industry analysts, vendor executives and other thought leaders over the course of the past year, here are my predictions for the top trends that will impact IT in 2011.

The Need for Speed is Relentless: For IT departments, the need for speed comes in two flavors: How fast can we provision IT infrastructure to process a given workload? And, how fast can we process the workload itself and turn data into actionable information? Cloud computing affects speed of provisioning by enabling rapid deployment of certain application services via the Software as a Service (SaaS) model. Speed does not kill, slow kills. Here is what I mean by that - businesses are going to survive and thrive because their IT infrastructure is fast and agile.

Fabric-based Infrastructure Gains Traction: Converged data and storage network fabrics will move from prototype to deployment as the Data Center Bridging (DCB) standards become well understood and iSCSI and FCoE networks move into the mainstream. Fabric-based infrastructure that abstracts processors, network bandwidth and storage into federated pools of easily deployable IT infrastructure will move from lab trials to mainstream deployment.

Virtualization Deployed for Production Workloads: A recent IDC survey found that customers are looking to not only increase the use of virtual servers, but also to increase the number of virtual machines per physical server. IDC forecasts that virtualized server shipments will grow at twice the rate of the entire server market through 2014. I predict that a significant part of this growth is going to come from virtual servers becoming a popular platform for mainstream applications. And, with solutions like IBM System Networking’s VMready, data center networks that tie together servers running these mainstream applications can now be made Virtual Machine-aware, thus removing a critical barrier that prevented enterprises from not being able to virtualize their mainstream applications.

Time Sharing at a Bureau is Back in Fashion: The tremendous interest in cloud computing is warranted because of the cloud’s promise of greater ROI and improved efficiency. SaaS-based application delivery will continue to gain in popularity in 2011 as a ready means of cost reduction, and simplicity. It’s a proven model, people….remember the 80s when enterprises shared CPU cycles on a large mainframe in a data processing bureau? Driven by privacy and regulatory concerns surrounding mission-critical data and customer information, enterprises will turn to the hybrid cloud model, deploying private clouds for essential information and using hosted and/or public clouds for less-critical data and applications, where the cloud can provide cost reduction and capacity on demand.

The Data Center Becomes Ever More Strategic: With less-essential workloads offloaded to the cloud, the in-house data center will become a highly leveraged business asset. The data center will operate a mix of dedicated processing, virtual servers and private cloud computing, with each considered a strategic IT asset. The in-house data center will be looked to for the advantages of what I have termed “rackonomics” for the greater ROI and improved efficiencies that come from deploying standardized racks of compute, storage and networking infrastructure, and will also be valued for what others have termed “cloudonomics” and “convergonomics.” Regardless of the economic model, for many industries and IT tasks, the in-house data center will remain a strategic business asset.

Security and Mobility will Redefine the Data Center Edge: Enterprises and their customers are using smart devices, such as iPads and smart phones to access corporate applications, in record numbers. This ubiquitous use of mobile computing will require ever greater amounts of bandwidth and place greater demands on the network, both in terms of security and mobility.

2011 is the Year of Smarter Systems: A smarter system is one that is optimized for a given workload and one where all the essential elements – compute, storage, software, and the network that connects all these pieces together is pre-packaged in a rack or multiple racks ready-to-use. All the customer needs to do is plug this system into an electrical outlet and start using it….just like we use our laptops today.

Real-Time Analytics Drive Business Decision Making: More powerful computers and faster networks will enable businesses to make more-informed decisions. It will become increasingly possible to run predictive simulations and real-time business analytics that forecast futures, rather than to simply provide after-the-fact analysis, which promises significant breakthroughs in business results. For example, GM is using high-powered IBM computers to simulate crashes and find ways to both prevent crashes and improve passenger safety when collisions/accidents occur.

Data Centers Will Become the Most Expensive Piece of Real Estate Anywhere in the World: With so much capital being invested in IT infrastructure, the “occupancy rate” of the data center will remain a key concern. Blade servers will increasingly give IT departments the flexibility they need to add incremental compute power and enable higher utilization in the data center. Blade server architectures will continue to gain in acceptance and market share in 2011. I also expect a new wave of blade center technology innovations to take hold in the latter part of 2011.

All-in-all, 2011 is most certainly going to be the year of Information Technology and a very promising one at that.